January 21, 2025 • 46 mins
How has Tullio Siragusa transformed nearshoring over the past 25 years?
Join us as Tullio, an industry pioneer, shares his journey from introducing nearshore services to the U.S. with SoftTech to navigating its evolution across Latin America. Discover how Mexico became a nearshore leader, Colombia's rise, and the unique contributions of talent from Monterrey and Guadalajara.
We also explore the role of AI in nearshoring, the growing interest in regions like Europe, and Tullio's insights on leveraging global talent. Drawing inspiration from Steve Jobs, Tullio highlights how empathy and design thinking shape business success. Plus, enjoy personal reflections on the cultural richness of Latin America.
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Linkedin: Tullio Siragusa | LinkedIn
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Welcome to the Nearshore Cafe podcast, home to
the most interesting stories andpeople doing business in Latin
America.
Speaker 2 (00:10):
Welcome everyone to the Nearshore Cafe podcast.
I'm Brian Sampson, your hostToday.
I want to welcome our sponsor,plug Technologies PLUGGtech a
great way to find softwareengineers in Latin America for
US companies.
I am really excited to welcomeour guest, tulio Siragusa.
(00:32):
Tulio was somebody I had inmind when I concepted this show,
as someone who's worked inNearshore for just about as long
as anybody has, and just reallyexcited to have you.
Welcome, tulio.
Speaker 3 (00:45):
Great to be here, brian, looking forward to the
conversation.
Speaker 2 (00:49):
Yeah Well, tulio, I'd love just to get right into the
nearshoring part of it.
This is something that you werereally early on.
Can you maybe set the scene alittle bit?
When did you start doing this?
What did the world look likewhen you were, when you were
venturing into this?
Speaker 3 (01:10):
You know, when I got into it I didn't realize I was
pioneering this near shoreinitiative.
25 years ago it was aroundSeptember of 1998.
I had just spent nine yearswith a very large telecom
company at MCI, predominantlyworking with global accounts,
(01:32):
and had a very strongrelationship with some of the
top Fortune 100 companies in theNew York area.
And I was approached by acompany by the name of SoftTech.
At the time it was fairly small, maybe 200, 300 people.
Their business for the previous17 years was predominantly in
(01:52):
Latin America and South Americaand they wanted to enter the US
market and take advantage of theY2K initiatives.
Right, that was generatingtremendous demand for talent,
which created opportunities forboth offshore companies and
nearshore companies.
This, mind you, was during atime when the economy was doing
(02:14):
very well, so the laborarbitrage wasn't as attractive
back then.
I remember speaking with theCTO of Bear Stearns, and I'll
never forget this conversation,and he says look, we have all
the money in the world.
I throw money at a problem.
I don't need to work near shore, offshore, hire the right
(02:35):
people and pay them right.
And that was a good lesson interms of what is it that the
actual value of this is so.
At the time, I remember workingwith Blanca Trevino, who's now
the chairman at SoftTech, hersister Fernanda, which is one of
the most creative people I'veever worked with in my life, and
(02:55):
we're sitting around inMonterrey, mexico, thinking
about how do we differentiateourselves from the offshore
players.
This was a time when the bigoffshore players were also small
.
They were all yeah maybe ahundred million dollars in
revenue.
They were definitely notmulti-billion dollar companies.
This is the heydays, the earlydays, the pioneering days of
(03:18):
both.
Speaker 2 (03:18):
So we're thinking of, like the tatas and the
outsourcing period yeah, the topof the tiny little companies
back then.
Speaker 3 (03:26):
So, anyway, the way I landed there is that they were
interested in bringing someonewho had strong business acumen
and connection with largeaccounts, and at the time, mci
was known as like the secondbest sales and marketing
organization in the world, nextto Xerox.
So we knew a thing or two aboutbringing new ideas to the
market.
I had just finished workingwith Vint Cerf in the early 90s
(03:50):
introducing the internet to theworld talk about the biggest
disruption that ever happenedand again doing it.
We weren't thinking this is abig disruption, we were just
putting some new solutions outto market.
And looking back, I actuallyinterviewed Vint a few years ago
on my other podcast and it wasjust an amazing experience, not
knowing that you were changingan industry.
(04:12):
In some cases, you werechanging the trajectory of the
world, of the business world.
So, similarly, we were justsitting around in a conference
room in Monterey trying tofigure out a way to coin a
differentiation right.
Well, they got offshore.
Who are we?
Well, how do we define who wedo, who we are, what we do?
And landed on this term nearshore services, and it stuck.
(04:38):
It has become the way youdescribe doing business in Latin
America, or at least tappinginto talent out of Latin America
.
For the past 25, 26 years, andso very early days of pioneering
this concept.
Of course, over the few decadesI've seen it evolve and mature
(04:59):
quite rapidly and expand.
First it was Mexico that hasbecome the most mature market
near shore and then, of course,now we have every country in
South America, with heavyemphasis in Colombia.
Colombia is a new emergingmarket where you have good
talent, cost of living is fair,so it's a whole new world now
(05:19):
and in fact Gardner has evenpredicted over the next few
years that a significant amountof outsourcing will shift to
Nearshore and Latin Americabecause the pandemic normalized
it right.
Yeah, the pandemic made itnormal to have remote workers
everywhere, and when it comes toNearshore, it's just another
remote worker.
It doesn't matter that they'rein Santiago or Guadalajara or
(05:44):
Cali, it really doesn't matter.
It's a similar time zone, avery westernized world culture
and, as a result, it's nodifferent than working with
someone who's in Tucson, newYork or Boston, for that matter.
Speaker 2 (05:55):
That's right.
That's right.
Yeah, I totally agree.
So back to the early days justfor a second.
What were some of the initialsales calls like Were buyers?
Did they need a lot ofeducation around how this worked
or did they instantly get itbecause offshore had already
(06:16):
matured a little bit?
You know, you think of the late90s and the internet.
The world is flat and ThomasFriedman and you know it's, uh,
it's, it's a little.
You know.
Offshore, I think, was moreaccepted.
Speaker 3 (06:29):
Um, they were both pioneering concepts, yeah yeah,
um, I think offshore had a jumpstar on it, but there were a lot
of challenges.
Many companies failed theirfirst initial outsourcing
efforts because they weren't setup to be successful.
In fact, I remember spending alot of time while I was at CSC
(06:55):
helping organization adoptshared service models Like first
learn how to share talent poolsand resources internally, where
you can have a centralized ITorganization, where each
department can basicallyleverage the capabilities and do
in sourcing Right.
(07:16):
Get good at that first, andthen that's a lot easier to
outsource once you've gottengood at that.
And so there were a lot ofchanges that needed to take
place within organizations to besuccessful in outsourcing
period.
So these were very early daysfor everybody, and the very
first sales calls were veryenlightening because quite often
(07:38):
there was a desire to eithercut costs or improve the
services that they wereproviding or expand the
capability of what they wereproviding to various business
lines.
But everybody owned their ownlittle kingdom, right.
So go back to like the way evenbig banks, citicorp or JPMorgan
Chase at the time it wasn'tJPMorgan Chase, was just Chase,
(08:02):
and then they merged later,right?
But if you go back to thosedays 25 years ago, each
department or each division hadits own IT.
There was no centralized IT.
So you had all these businessunits that had their own IT
department and so whenever theyneeded to get something done,
(08:22):
they budgeted for it and managedit within its own division.
So selling to those companiesoften required connecting with a
lot of division heads.
So the idea of coming in toouts had the ability to do a lot
(08:50):
more centralized deploymentsand really, if you think about
it, the middleware it changedthe tech industry right, allowed
for disparate systems to cometogether and that created
opportunity for, uh,centralizing it and even
(09:11):
services around it.
So as technology advanced, thatwas really the first thing that
made the shift for everybody tobe able to outsource, you know,
the introduction of middlewaresoftware, right, or middleware
uh solutions, so.
So the initial calls were veryenlightening because, um, they
were everywhere, you know.
Somebody was interested in thecost savings, somebody just
(09:33):
couldn't find enough staff.
So there were a number ofthings, and what I realized very
early on was we needed tospecialize.
This was before open sourcesoftware, so the majority of the
near shore projects andoffshore projects were very IT
centric and off-road projectswere very IT-centric, and so
(09:57):
your specialization evolvedaround helping implement things
like SAP or Oracle or PeopleSoftor BI solutions that were
becoming more prevalent.
And what was happening at thesame time is a lot of these big
companies were pushing softwareand many of those
implementations were failingbecause they hadn't figured out
yet that you have to customizethe stuff in order for actually
(10:20):
to work.
So there were a lot ofdisruptions happening at the
same time.
It was like a perfect storm,and in some cases, if you had
developed a good enoughspecialty in one area or another
, you could differentiateyourself and, of course, if you
were in a position to do it at alower cost.
You can also differentiateyourself.
(10:41):
The other challenge was youdidn't have enough staff.
Like you know, this was theearly days of IT in, for example
, mexico, so the country itselfwasn't pushing it as a way for
export, just like India was alittle bit more ahead of its
time in terms of pushing it, soit was more challenging in the
(11:03):
early days.
The sales cycles were longer andthe conversations were very.
Mostly the salespeople werelearning what would work and
stick.
But eventually we figured out.
You know you have to get goodat specializing in certain
competencies and I remember westarted to get very focused
around some SAP competencies andwe landed on some strong ABAP4
(11:27):
development type of competencies.
That was the rave back then andso we started focusing on that.
And then we also startedfocusing on some CRM initiatives
.
Again, crm look at Salesforce.
Back then they were a smallcompany.
They were not the behemothgiant they are today.
So I remember being able tocontact some of the CEOs of
these companies back then andworking with them and figuring
(11:50):
out how do we solve this problemfor this particular client.
So very early days of learninghow to position these services
to a certain degree, it was likebeing in a startup.
You know stuff.
Speaker 2 (12:05):
Yeah, you know, as you were talking, I was just
thinking about things we takefor granted today, like agile
development, aws, slack, jira,and I'm sure some of that didn't
even exist.
You had to find solutionsaround that as well.
Speaker 3 (12:22):
Very different world and we certainly weren't talking
about developing software.
Companies were not trying tofigure out do we license and
customize versus build and own?
Open source really hasdemocratized building out
software.
Many companies the lines areblurring today between what is
(12:43):
an enterprise company or atechnology company.
Many enterprise companies haveadopted build your own software
stacks.
Those were not the days wherethis was happening.
It was very clear cut.
I had a third-party platform.
I had middleware software Ineeded to work with.
I'm trying to get some BI inplace.
You know you're working withMicroStrategy, the SAPs of the
world, the Oracle, the Siebelsystems of the world.
(13:04):
I mean, some of these companiesdon't even the names, don't even
exist anymore, right, but itwas a different world.
It was very fragmented and, uh,everything was done on premise.
Yeah, so remote work was alsoforeign.
So we had a lot of challengesof introducing something that
hadn't been done, uh,introducing something that was
different, while at the sametime there were many other
(13:26):
technology disruption,middleware was being introduced.
Uh, you know, other things werecoming on board new startups,
new technologies, new beingintroduced.
Other things were coming onboard new startups, new
technologies, new computingpower.
All these things were happeningat the same time.
So in the early days you'rejust trying to.
It's like a race.
You're keeping up witheverything that's going around
you.
It's still happening today, butnot at the pace this was back
(13:47):
then.
This was such atransformational moment in our
technology history that anythingthat can help you differentiate
yourself was key.
So landing on terms like nearshore, developing certain
expertise being very nichefocused and owning a segment,
building partnerships withcompanies that were moving the
envelope forward these were allkey things to being successful
(14:10):
back then.
Speaker 2 (14:11):
Yeah, one other thing I was going to ask you about
with the early days, which isstill a factor today, is customs
and hardware and getting theright equipment to the right
people.
And you know, as countrieseither ease or create more
constraints around, you knowmoving equipment around.
What was that like?
(14:32):
And you mentioned Monterey, soI imagine most of the operation
was there.
What was that like in the earlydays?
Speaker 3 (14:39):
Difficult, but you know you had to be a lot more
creative.
Let me just paint the pictureof a typical solution that is
actually embedded in our phonestoday.
Typical solution that isactually embedded in our phones
today.
I remember working with Viacom,which owns MTV and VH1.
And the MTV and VH1 executiveswere complaining about how much
(15:07):
travel the creative teams neededto do between New York and Los
Angeles, and so the number wasvery costly.
There was, if number was verycostly, number two.
It's just very productive, verytime consuming, so it had an
impact on productivity, whichultimately impacts creativity.
So, like, is there a way we cancreate collaborative rooms?
You know conference roomsbetween these two cities, and so
(15:30):
I remember working on creatinga video conferencing room and
back then it literally like youhad a conference room that was
wired with like equipment and Iremember talking to picture tell
about needing the hardware forthe equipment and cisco for the
collaborative platform and thevarious software that needed to
play into this.
(15:51):
And then you have to deal withthe, the telecom connectivity,
and did you have enoughbandwidth between these two
locations?
This is live video on aconference.
So t1 wasn't going to cut itand ds3s were very expensive
back then.
There's so many factors.
This was a multi-million dollarinitiative.
Today we have facetime on ourphone, zoom right, I mean it's
(16:12):
like it's we take it for grantedI can just connect with a
hundred people instantly.
You don't think about do I haveenough connectivity, do I have
enough bandwidth between you?
Just don't even think about itback then.
That that was the kind of stuffwe had to work on and put
together and and uh, it wascomplex challenges,
multi-million dollar challengesthat today just becomes a
(16:33):
commodity right.
So those were very much theheydays of putting us on a path
towards automation, towards moreconnectivity.
And the technology just wasn'tup to snuff.
So it was more costly, it wasmore complicated, you had to put
together a lot of differentpartners.
You didn't have a one-stopsolution, but the guys who
played in it learned.
More costly, it was morecomplicated, you had to put
(16:53):
together a lot of differentpartners.
You didn't have a one-stopsolution, but the guys who
played in it learned a lot.
We learned how to solveproblems.
We learned how to leveragetechnology to solve business
problems.
This wasn't about implementing avideo conferencing solution.
This was about connecting twocreative teams together on a
regular basis so that they canimprove their productivity.
(17:14):
So we learned how to tie in thetechnology to solve the right
business problem, and thosethings have informed many of the
things that have come over theyears that still, you know, have
evolved into agilemethodologies, lean canvas, all
these things.
Design thinking contributedtremendously to a lot of these
things that we now take forgranted or are readily available
(17:37):
at our fingertips.
But I felt like I was workingwith the people that were paving
the way for the early days oftechnology and the evolution
that it's taken over the past 25years.
Yeah, that's awesome.
Speaker 2 (17:49):
Um, no I didn't know at the time.
Speaker 3 (17:51):
I was participating in that.
That's the funny thing.
You're just doing it and thenyou realize you look back like,
oh, we kind of did a lot tochange the world.
Had no idea we were doing that.
Speaker 2 (18:02):
Yeah, we rarely ever know we're in the moment until
the moment passes.
But yeah, that's a great pointand maybe a little bit of a
change to geography.
So my understanding is themajority of your near-shore
experience was leveraging Mexico.
Talk about some of your travelsthere experiences, cities,
(18:27):
meals We'd love to hear some ofthe fun stuff too.
Speaker 3 (18:32):
I fell in love with mexico back then.
I was, uh, traveling in and outof monterey I lived in new york
city at the time prettyregularly was not easy to get a
direct flight.
I'd fly, usually throughhouston, and, uh, I would say I
wish we had more, you know, zoomand things like that that we do
(18:53):
today, because back then a lotof things happened in conference
room and whiteboards, a lot oftraveling, and I was a new
father at the same time, so Idid miss out a lot in terms of
my son's growth with all thattravel.
I remember one time I traveledI was, I think, in four cities
in one day.
So you know, I had breakfast inone city, lunch in another,
(19:15):
dinner in another.
I think.
Three cities, excuse me, notfour, but you know that's the
way it was back then.
So I was younger, I hadprobably a little more energy
than I do now, but I did fall inlove with the Monterey.
It was a great culture, veryservice-oriented culture.
I've had the pleasure since thenof traveling into other cities
(19:37):
and operating in other cities,like Guadalajara and Hermosillo
and Chihuahua in Mexico City,even Merida on the east coast of
Mexico, and I've seen in Colimajust south of Guadalajara.
They have all the uh, all theum react talent in the world
over there.
(19:57):
So you know I I've um, you knowI've.
The whole near shore space hasreally evolved since then.
Now it's not just mexico, youhave costa rica, you have peru,
chile, colombia, argentina,brazil, and every country has
(20:20):
its own specific nuances andspecialties.
Some of them are more mature inone area than others.
So it really becomes importantto understand the landscape If
you're a service company,especially that you can make a
recommendation based on whereyou think the best talent is.
There are certain skill setsthat are strong in some markets
than others, so it's really justunderstanding your product, and
(20:42):
the product is the people andthe talent.
But I've been amazed at thequality of work that happens out
of Latin America.
I've worked with engineers thathave been toe-to-toe as good as
any Google engineer, and soit's very impressive.
And also because it's a Westernworld culture, it's not a very
(21:04):
yes-oriented culture, whichhappens a lot in Asia.
So when working in agileenvironments that require daily
stand-ups number one, you coulddo it in concurrent working
hours.
Number two, it's not a yes,we'll get that done and figure
it out later it's more like no,that doesn't work.
Here's why.
So there's more of acollaborative situation that
(21:28):
takes place.
So I've learned that if youwant to create the closest
experience to having hired agood employee, a remote employee
, your best bet out of NorthAmerica will be, you know,
really in Latin America.
That's where you're going toget to that experience, and
that's not me selling it becauseI've been involved with it for
25 years.
It's just the fact of havingseen it hands-on.
(21:50):
And it works the same way forother regions of the world that
are near shore to those markets.
And so, ultimately, what I thinkhas happened, brian, is the
outsourcing space has evolvedand matured to the point where
everybody understands the valueof near shore.
Everybody wants near shorewithin their continent.
(22:12):
People in Europe want nearshore, which is why Eastern
Europe has grown so much.
You have development shops inthe Ukraine and Poland and
Croatia.
They're serving the needs ofthe UK and EMEA.
They also serve the needs ofthe US on an offshore basis.
But I think the pandemic reallyopened people's eyes to realize.
You know, what we really needis just remote workers that are
(22:35):
within the same concurrentworking hours.
So you're going to see acontinuous shift, I think over
the next five to 10 years, wherethe concept of offshore will
become mute.
It's more like where can I findthe talent that's close to
where I work?
So if it's Europe, it might beEastern Europe.
If it's Asia, it might be inIndia and Vietnam or in Malaysia
.
If it's in North America, itcould be Latin America or it
(22:57):
could be Canada.
Right, but the point is peoplewant to work within the same
concurrent working hours andalso there's a cultural
alignment and there's a strongerpropensity to understand the
accents within the region thatyou're in.
Right, and then that's areality you have to face.
You know we're all verydifferent.
You have to accept thosecultural differences too and
(23:19):
harmonize them, and sometimesworking in a nearshore fashion
everywhere allows that to happen.
So I'm excited to have seen howwe started something in one
region that has been reallyreplicated throughout the world.
Speaker 2 (23:32):
Yeah, you know, one thing that I noticed you didn't
lead with with some of thereasons was price, and of course
it's cheaper than onshore.
But I feel like the world hasrealized like you can only go to
the bottom on price.
Nearshore is not really leadingwith price.
(23:55):
It's workday overlap, it'squality of work, it's cultural
alignment.
I don't know if you have anythoughts on that.
Speaker 3 (24:03):
There's also been a shift, Brian.
Speaker 2 (24:08):
Yeah, how price is part of your conversations with
buyers lately.
Speaker 3 (24:14):
Most of the outsourcing companies started in
IT services and selling toenterprise companies, where the
expectation has always been youscope the work, you take
ownership and you move itforward and in that model you
(24:35):
can have a lot of leeway interms of the kinds of talent you
have on the team.
You can have a mixture ofsenior and junior so you can
manage the margin right andthere's definitely a cost
benefit of having done itoffshore and nearshore.
That was a big driver.
The labor arbitrage was a bigdriver.
The cost the labor arbitragewas a big driver initially,
absolutely no question about it.
(24:57):
The gap between what the savingswere back then to what it is
now has continued to shrink andthe reason for that is because
there's also been a shift in thetalent pool.
There's more demand forsoftware engineering talent
versus systems integrationengineering talent, which is
very different DNA.
(25:18):
I could be a systems integratorworking on a third-party
software, doing customizationand doing that kind of work.
That's a different skill thansomeone who can write code from
scratch and build a product,than someone who can write code
from scratch and build a product, someone who could take an idea
from an app and build a product.
So over the years, a lot hasshifted towards agile, towards
(25:40):
building more products.
Software is really kind ofeating the world, and not only
technology companies have had aneed for more developers and
there's not enough of them inthe US, so it's become an issue
in just where's the talent right?
So when you get to a placewhere you have 10 openings for
every one available engineer,you don't have enough people, so
(26:01):
you have to look beyond yourboundaries, and so it's not so
much.
Where can I go save money as itis?
Where can I go find the talentto keep my roadmap on track, to
make sure I follow through onthe promises I made to the board
?
Yeah, so it's.
It's a critical shift.
Now there's still some who camefrom the it space.
They're always trying tonegotiate a better deal, but
(26:22):
it's like you know what's what'sreally important here you make
some commitments and you can'tfind people.
So don't worry about the price.
The price is a component, butit's not the component.
So the focus needs to shift andit's happening more near shore.
I've seen it, which is one ofthe reasons we've expanded into
(26:43):
other markets in Latin America.
We keep expanding into othermarkets because there's still
that desire for labor arbitrage.
That's always there, right?
But as time goes by, you'regoing to see a continuous shift
around that, because, especiallywith more technology that's
driving everything and moresoftware that's running
everything, ai in some casesmight eliminate some jobs, but
(27:07):
in other cases will create morejobs for people who can build
these things, who can managethese things, who can execute
against them, and those arespecialized skills that you're
not going to get good talent ifyou're trying to be, you know,
cheap, right?
So the idea is to balance that.
There's still value in thelabor job arbitrage, but it's
more like 15, 20% versus what itused to be 50, 70%, yeah, and
(27:31):
you can get more savingsoffshore, but then that's also
shifting.
I mean, let's look at India,right, India's got its own tech,
silicon Valley approach tothings today.
So if you were a servicescompany, you're losing people to
folks who want to go work for asoftware company.
They don't want to be in aservices company, they want to
be in a product company.
They want to replicate what'shappened in Silicon Valley.
(27:53):
So it's taken a lot longer tofind talent.
The attrition rate's a lothigher if you're in a service
business, because people want towork for software companies.
So the market's shifting there.
So you have to keep in mindthat with that shift comes
rising costs because you'recompeting for talent.
And when you compete for talentthe prices go up.
(28:14):
And the same thing is happening, you know, in Mexico and other
marketplaces as well.
So it's really about where canI find the best talent that
serves the needs that I need formy roadmap In the IT space?
You still have a lot moredifferent cost structures.
Lower cost structures becauseit's not as complex as building
software.
You're really just customizing,implementing and integrating.
Speaker 2 (28:37):
Yeah, yeah, that's great.
That's great Just for fun'ssake.
A lot of people I know in theUS, when they think of Mexico
and tourism, they're thinkingCancun, Acapulco and so forth.
They're not necessarilythinking Monterey, Guadalajara,
(28:58):
places that you've spent a lotof time in.
Give us your tourism pitch forthose cities and what would be
draws for people to check thoseout.
Speaker 3 (29:11):
Well, I mean Monterey , caprito is the king of
Monterrey, you know, it's likeyou want some good goat or lamb,
that's the thing.
They know how to make it reallywell.
Oddly enough, one of the bestItalian meals I've ever had was
actually in Monterrey, mexico,and I grew up in Italy, so that
says a lot about the kind ofit's very much a foodie kind of
(29:33):
area, and if you like limemountains and that kind of thing
, you'll definitely enjoy it.
But every place is different.
You know Hermosillo they makethe best steaks on the planet
there and they're known like theNew York Times rated them as
the best hot dog in the world,right?
So if you want a doggo, you goto Hermosillo.
And they have some other thingsthere, from a foodie's
(29:55):
perspective, that you can't findanywhere else, even the
Bacanora, which is a form oftequila that's very specific to
the Sonora region.
You can't find that even inother areas of Mexico.
And then, of course,guadalajara has its own
delicacies too, you know, andthat's a very modern city.
If you go into, like Zapon, thedowntown area, you feel like
(30:17):
you're in New York City.
If you take a picture from arestaurant outward and you send
it to a friend, they're going tothink I thought you were in
Mexico, you're in New York.
It's a very different vibe.
So it's a very modernized city,and in Mexico City it's the
biggest, I mean, it's huge.
You fly over it for an entirehour before you land, right.
So it's, you know, it's there'ssomething for everyone, but the
(30:41):
people are very, um, serviceoriented, uh, it's, it's a, it's
a giving, hard working kind ofculture, and so there's
definitely, uh, a lot thatyou'll enjoy.
So you know this.
I'm talking about the citiesthat are non-tourist cities.
Yeah, so, of course, thetourist locations, the beaches,
(31:02):
etc.
All that thing is wonderful,but in the uh, in the other
cities, you won't feel likeyou're in such a foreign place.
Yeah, people always surprise,like this feels like I'm back
home, because because it's it'sa modernized country with a lot
of modern cities.
Speaker 2 (31:16):
Yeah, yeah, that's great.
That's great Talk about whatyou see for the future.
You know of nearshoring anddevelopment, and you mentioned
AI before.
What are some trends orpredictions that you recommend
we're mindful of?
Speaker 3 (31:35):
I think we're going to see more globally distributed
teams where the programmanagement or program management
, I'm sorry, project managementthe subject matter experts, the
architect type will be close tohome.
So you're going to see more ofonshore, nearshore demand for
(31:56):
that kind of expertise becauseit just makes sense, it's smart
business to do it that way andleveraging still some arbitrage
opportunities offshore where youcan.
So I think ultimately there'sstill some companies that have
waterfall methodologies thatallows them to do follow the sun
(32:18):
, and then there's those whohave more agile methodology that
doesn't allow it, so they needto work more in the same time
zone.
But I think over time, what AIwill do is a couple of things.
I think AI can enable a followthe sun for everyone so that you
can leverage globallydistributed team more
effectively, so that you canleverage globally distributed
(32:39):
team more effectively.
So in some ways, if donecorrectly, ai can build some
program management expertisethat can automate the
distribution of work and alsohelp facilitate it, because
that's hard work sometimes youcan't be up all day and all
night managing these teams right.
So I think AI will be a gamechanger from that point of view.
(33:01):
Also, you're going to see moreof AI being used for some
automation like testing and QA,even some development.
So some of the teams will playmore of a not kind of role,
right, they're monitoring thebots doing the work, making sure
it's following a good cadence,and they're playing that expert
role and, as a result of that,you can do it more effectively,
(33:26):
no matter where people are, andwhat ultimately will happen.
This is just my own prediction.
I don't know if it'll take 20years or 10, the price points
will be very similar no matterwhere you go in the world.
I think the arbitrage modelwill eventually disappear and
it's just going to come down towhere can I find the best talent
?
How am I leveraging AI tomanage it all in such a way
(33:48):
that's transparent and seamlessand that's going to change the
trajectory of the entiresoftware development industry.
We're not there yet.
I don't think we see it yet, butthis is just what I'm seeing in
terms of how AI will evolve ourspace and really just in some
ways, create more equivalenceworldwide.
(34:10):
You know, I think this idea ofarbitrage shouldn't be there
personally.
So in some regards, it's goingto equalize things worldwide and
the cost savings will come fromsome more automation and using
AI, so you'll still get it, butit's not going to come from the
(34:30):
arbitrage of labor based onwhere people are.
That's just my personalprediction, based on what I'm
seeing and what I've seen overthe past 34 years, of where
things are going to go.
When are we going to get there?
I don't know 10 years, 20 years, maybe the next five years, but
I think that's where it's goingto go.
Speaker 2 (34:45):
Sure, Now, in the present day I really think this
is the decade for Latin Americaand more and more conversations
I'm having there's moreawareness, which leads to more
curiosity, of, oh, likeNearshore.
(35:06):
What is that?
Can you explain it to me?
Which means there's morecompanies trying this out for
the very first time.
What sort of advice would youhave for companies that are
making their first venture intonearshoring, that are making
their first venture intonearshoring.
Speaker 3 (35:20):
I think it's a valid point, not just for North
America, but you'll see the sametrend in the UK and Europe,
with South Africa, for example,and Eastern Europe.
Both are good nearshorelocations from a concurrent
working hours, and you'llcontinue to see more in Asia
with, like India and Vietnam.
(35:41):
Vietnam is an emerging marketthat is actually very strong.
For example, our company wehave 2% attrition rate out of
Vietnam, which is unheard of inthis industry.
So it comes down to this Don'tlook at it as near shore or
anything like that.
I think that term while I'mproud that I was part of the
(36:01):
team that created it needs to bedropped.
It's just remote work, and ifanything the pandemic has taught
us is that you can get thingsdone no matter where you are,
(36:23):
things done no matter where youare.
So if you're new to Nearshore,just think of I'm just hiring
remote workers.
It doesn't matter if they're inGuadalajara, in Lima, in Cali
or Santiago.
It really doesn't matter.
It's no different than thembeing in Dallas, tucson, new
York.
It's no different than thembeing in Dallas, tucson, new
York, miami or Seattle.
And that shift in mindset willopen up many, many more doors
(36:45):
for technology leaders, becausethey'll begin to realize that
there's people on both sides,whether they're onshore or
nearshore, and it really justcomes down to having good
connection, being able tocommunicate with each other,
being able to have intimacy,which is what happens with
concurrent working hours andultimately, just think of it as
(37:05):
remote workers.
It'll save yourself a lot ofheadaches like, oh my gosh, such
a big thing, we're movingoffshore, near shore, now you're
just tapping into anotherremote worker marketplace.
Yeah, that would be my advice.
That's good advice.
Speaker 2 (37:20):
Tulio, since I've met you, you've spoken a lot about
design thinking.
Can you share a little moreabout what that means and also
how it's come into play withremote work?
Speaker 3 (37:33):
Yeah, I've really embraced design thinking,
because what resonated for me isthis idea that the pillar of
design thinking is empathy.
You know, the genesis wasdifferent.
It was very focused on productand user experience, but it
really has evolved to be a wayto organize your efforts around
(37:57):
either solving a problem orfinding solutions or creating
opportunities.
And it's not just how you lookat user adoption for a product
or your go-to-market strategy.
It's really about how youorganize people and how you get
people working together.
(38:18):
People and how you get peopleworking together.
And at the end of the day,brian, no matter whether you're
a B2B company, a B2C company ora B2B2C company, we're all in
the people-to-people business.
There's a person who's buyingyour product or service.
There's a person who's sellingit.
There's a person who createdthe code on the website that's
(38:39):
selling it to you.
There's a person who investedin the company.
There's people involved,whether it's a direct
person-to-person relationship orthere's an app in between.
On both sides there's a person,and so understanding that
empathy allows us to get at adeeper level, not just a
(39:02):
transactional level, allows usto think about how do we create
better experiences that meetpeople's needs.
So when I think of designthinking.
It's a model for finding waysto get closer to providing on
the needs of people on theirterms, and so it creates an
(39:24):
environment where, when youthink about what you're solving,
you elevate it right.
So, for example, what does a CTOreally want?
They're in charge of a productroadmap.
They need developers, they needtesters, they need architects,
they need scrum math, they needall kinds of people that can
(39:45):
perform transactions right.
But the ultimate desire is tobe successful in order to meet
the needs of the commitmentsbeing made to the investors or
the board.
And, tied to that, your abilityto be successful is your
ability to take care of yourfamily, to achieve your
(40:08):
aspirations, all the personalthings that drive us on a
day-to-day basis.
Yeah, so when you're selling toa CTO, you have to keep in mind
empathetically what is it thatthey actually really want?
Those are the things that theyreally want as a human being.
The rest is just transactionthat enables them to achieve
(40:30):
what they really want.
So what design thinking does isit enables you to ask the
question five whys deep, tounderstand.
What is it that you're reallysolving?
What is the real problem?
What is the real desire thatyou're delivering on?
And it's got to be anemotionally tied desire, because
we're emotional creature.
And so as you begin to thinkabout how you structure your
(40:50):
organization, how you structurehow you serve clients, how you
structure how you build products, when you keep that in mind, it
changes your approach for thebetter.
And what happens is you beginto operate with the adoption in
mind up front, because it's allabout creating a great
experience for your employees,for your clients, for your
(41:14):
investors, for your partners,for your vendors.
If you keep that in mind, theonly way to effectively do that
is to use design thinkingmethodologies which allows you
to listen, ask more questions,connect, understand what the
real problem is or what the realdesire is, prototype and test
ideas, reiterate and get it to aplace where you're actually
(41:35):
driving intimacy.
And I mean when you think aboutsomeone like Steve Jobs.
He was masterful at it.
Apple, the Mac was not asuperior product when it first
came out to the PC.
Quite the opposite, it wasn'teven close.
But he created this emotionalattachment where, if you're a
cool kid, you're going to usethe Mac.
(41:56):
You know cool kids use Macs.
Or the crazies making the worldgo around use max.
I mean, look at that commercialthat they had out with einstein
.
You know we're we're supportingthe crazies who believe that
they can make a change in theworld, right?
So if you're one of the coolkids and you're the creative
type, it's like I'm one of thecrazies, I'm going to buy a mac.
He created a culture aroundthis.
(42:17):
You know, being part of thisgroup of cool kids, you know
that are creative and eventhough the product was not up to
snuff, eventually and it's nowthe leading PC in the
marketplace computer in themarketplace, right.
But he was masterful inappealing to the need and desire
of emotional creatures.
(42:39):
And he's not the only one who'sdone that.
There have been many otherbrands who have done that.
So if you can apply that in aB2B context, especially because
a lot of people think, oh, I'mjust trying to get a transaction
done, but there's still.
That is not true.
You can apply empathy intoeverything you do and I always
say empathy wins, always Ifyou're in a competitive
environment and you'representing your solution and
(43:02):
it's transaction versustransaction, the client's going
to choose the one that they feellike.
These guys understood me, theyvalidated my concerns, they
created a better experience andit's all subconscious, it's not
like they're actuallyconsciously thinking through
this.
It's because they feel thatthey were more understood.
(43:23):
So if it's apples to apples,the one that's going to win is
the one that's applying empathy.
So I really love it for manyreasons, because I believe that
as leaders, it's our duty tohelp people feel empowered and
to meet their needs.
The more we meet people's needs, the more we can all be
successful.
So everybody gets lifted up bydoing that.
(43:43):
No one suffers, no one loses byapplying empathy.
So design thinking is really asystem for improving the
human-to-human connection, to bemore people-centric in how we
do business.
Speaker 2 (43:57):
Yeah, great points about intimacy and empathy.
Yeah, thanks for sharing that.
Well, as we start to wind downthe show today, I just had a few
fun questions for you.
Sure, your favorite purchase inLatin America under $50?
(44:18):
Your favorite purchase in latinamerica under 50.
I gotta think about that one,besides food.
Well, if food is the answer,I'd love to hear that I mean
food.
Speaker 3 (44:27):
I would.
I would have to say food.
I remember, um I 50 would getyou really far.
Yeah, a restaurant, I mean youand your friends can eat like,
like kings and queens, for 50bucks.
Uh, you can have an incrediblemeal for under 50, and I'm not
talking about like, like itwould be equivalent of having
(44:49):
spent 500 here that kind oflevel meal.
So if you want to have like a,an incredible, like dining out
experience for less than 50bucks, you will.
You know, latin america willnot fail you yeah, I agree, I
agree wholeheartedly.
Speaker 2 (45:04):
Yeah, absolutely.
Uh, how about uh vocabulary?
Do you have a favorite spanishword?
Speaker 3 (45:13):
uh, I have one cute word, but, but it's an
inappropriate word.
You'd be surprised how oftenthat comes up on the show.
It's just a cute kind of way ofreferring to someone.
But I think in recent yearsthere was someone I worked with
in my last company that alwayssaid goodbye by saying besitos.
(45:36):
So I kind of adopted that as acute little word.
Sometimes I'll say things likebesitos, which means kisses, but
he could get away with thatkind of thing.
I don't know if I can get awaywith it as much as he did, but
that was definitely a cute wordbesitos as a way to say hi and
goodbye.
Speaker 2 (45:50):
Sure fair point.
Well, tulio, that's all thetime we have today.
Really appreciate you coming onthe show.
I want to give a thanks againto our sponsor, plug
Technologies pluggtech a greatplace to find software engineers
in Latin America for UScompanies.
Tulio, thanks again, it'sreally been a blast.
Speaker 3 (46:12):
Pleasure.
Thanks for having me All right,everyone.
We'll see you next time,besitos.
Speaker 2 (46:14):
Thanks for having me All right, everyone.
We'll see you next time.
Speaker 3 (46:19):
Besitos.
Speaker 1 (46:22):
Thanks for joining us at the Nearshore Cafe podcast
Tune in next week for a newepisode featuring another
special guest with excitingstories Ooh.
Welcome to the Nearshore Cafe podcast, home to
the most interesting stories andpeople doing business in Latin
America.
Speaker 2 (00:10):
Welcome everyone to the Nearshore Cafe podcast.
I'm Brian Sampson, your hostToday.
I want to welcome our sponsor,plug Technologies PLUGGtech a
great way to find softwareengineers in Latin America for
US companies.
I am really excited to welcomeour guest, tulio Siragusa.
(00:32):
Tulio was somebody I had inmind when I concepted this show,
as someone who's worked inNearshore for just about as long
as anybody has, and just reallyexcited to have you.
Welcome, tulio.
Speaker 3 (00:45):
Great to be here, brian, looking forward to the
conversation.
Speaker 2 (00:49):
Yeah Well, tulio, I'd love just to get right into the
nearshoring part of it.
This is something that you werereally early on.
Can you maybe set the scene alittle bit?
When did you start doing this?
What did the world look likewhen you were, when you were
venturing into this?
Speaker 3 (01:10):
You know, when I got into it I didn't realize I was
pioneering this near shoreinitiative.
25 years ago it was aroundSeptember of 1998.
I had just spent nine yearswith a very large telecom
company at MCI, predominantlyworking with global accounts,
(01:32):
and had a very strongrelationship with some of the
top Fortune 100 companies in theNew York area.
And I was approached by acompany by the name of SoftTech.
At the time it was fairly small, maybe 200, 300 people.
Their business for the previous17 years was predominantly in
(01:52):
Latin America and South Americaand they wanted to enter the US
market and take advantage of theY2K initiatives.
Right, that was generatingtremendous demand for talent,
which created opportunities forboth offshore companies and
nearshore companies.
This, mind you, was during atime when the economy was doing
(02:14):
very well, so the laborarbitrage wasn't as attractive
back then.
I remember speaking with theCTO of Bear Stearns, and I'll
never forget this conversation,and he says look, we have all
the money in the world.
I throw money at a problem.
I don't need to work near shore, offshore, hire the right
(02:35):
people and pay them right.
And that was a good lesson interms of what is it that the
actual value of this is so.
At the time, I remember workingwith Blanca Trevino, who's now
the chairman at SoftTech, hersister Fernanda, which is one of
the most creative people I'veever worked with in my life, and
(02:55):
we're sitting around inMonterrey, mexico, thinking
about how do we differentiateourselves from the offshore
players.
This was a time when the bigoffshore players were also small
.
They were all yeah maybe ahundred million dollars in
revenue.
They were definitely notmulti-billion dollar companies.
This is the heydays, the earlydays, the pioneering days of
(03:18):
both.
Speaker 2 (03:18):
So we're thinking of, like the tatas and the
outsourcing period yeah, the topof the tiny little companies
back then.
Speaker 3 (03:26):
So, anyway, the way I landed there is that they were
interested in bringing someonewho had strong business acumen
and connection with largeaccounts, and at the time, mci
was known as like the secondbest sales and marketing
organization in the world, nextto Xerox.
So we knew a thing or two aboutbringing new ideas to the
market.
I had just finished workingwith Vint Cerf in the early 90s
(03:50):
introducing the internet to theworld talk about the biggest
disruption that ever happenedand again doing it.
We weren't thinking this is abig disruption, we were just
putting some new solutions outto market.
And looking back, I actuallyinterviewed Vint a few years ago
on my other podcast and it wasjust an amazing experience, not
knowing that you were changingan industry.
(04:12):
In some cases, you werechanging the trajectory of the
world, of the business world.
So, similarly, we were justsitting around in a conference
room in Monterey trying tofigure out a way to coin a
differentiation right.
Well, they got offshore.
Who are we?
Well, how do we define who wedo, who we are, what we do?
And landed on this term nearshore services, and it stuck.
(04:38):
It has become the way youdescribe doing business in Latin
America, or at least tappinginto talent out of Latin America
.
For the past 25, 26 years, andso very early days of pioneering
this concept.
Of course, over the few decadesI've seen it evolve and mature
(04:59):
quite rapidly and expand.
First it was Mexico that hasbecome the most mature market
near shore and then, of course,now we have every country in
South America, with heavyemphasis in Colombia.
Colombia is a new emergingmarket where you have good
talent, cost of living is fair,so it's a whole new world now
(05:19):
and in fact Gardner has evenpredicted over the next few
years that a significant amountof outsourcing will shift to
Nearshore and Latin Americabecause the pandemic normalized
it right.
Yeah, the pandemic made itnormal to have remote workers
everywhere, and when it comes toNearshore, it's just another
remote worker.
It doesn't matter that they'rein Santiago or Guadalajara or
(05:44):
Cali, it really doesn't matter.
It's a similar time zone, avery westernized world culture
and, as a result, it's nodifferent than working with
someone who's in Tucson, newYork or Boston, for that matter.
Speaker 2 (05:55):
That's right.
That's right.
Yeah, I totally agree.
So back to the early days justfor a second.
What were some of the initialsales calls like Were buyers?
Did they need a lot ofeducation around how this worked
or did they instantly get itbecause offshore had already
(06:16):
matured a little bit?
You know, you think of the late90s and the internet.
The world is flat and ThomasFriedman and you know it's, uh,
it's, it's a little.
You know.
Offshore, I think, was moreaccepted.
Speaker 3 (06:29):
Um, they were both pioneering concepts, yeah yeah,
um, I think offshore had a jumpstar on it, but there were a lot
of challenges.
Many companies failed theirfirst initial outsourcing
efforts because they weren't setup to be successful.
In fact, I remember spending alot of time while I was at CSC
(06:55):
helping organization adoptshared service models Like first
learn how to share talent poolsand resources internally, where
you can have a centralized ITorganization, where each
department can basicallyleverage the capabilities and do
in sourcing Right.
(07:16):
Get good at that first, andthen that's a lot easier to
outsource once you've gottengood at that.
And so there were a lot ofchanges that needed to take
place within organizations to besuccessful in outsourcing
period.
So these were very early daysfor everybody, and the very
first sales calls were veryenlightening because quite often
(07:38):
there was a desire to eithercut costs or improve the
services that they wereproviding or expand the
capability of what they wereproviding to various business
lines.
But everybody owned their ownlittle kingdom, right.
So go back to like the way evenbig banks, citicorp or JPMorgan
Chase at the time it wasn'tJPMorgan Chase, was just Chase,
(08:02):
and then they merged later,right?
But if you go back to thosedays 25 years ago, each
department or each division hadits own IT.
There was no centralized IT.
So you had all these businessunits that had their own IT
department and so whenever theyneeded to get something done,
(08:22):
they budgeted for it and managedit within its own division.
So selling to those companiesoften required connecting with a
lot of division heads.
So the idea of coming in toouts had the ability to do a lot
(08:50):
more centralized deploymentsand really, if you think about
it, the middleware it changedthe tech industry right, allowed
for disparate systems to cometogether and that created
opportunity for, uh,centralizing it and even
(09:11):
services around it.
So as technology advanced, thatwas really the first thing that
made the shift for everybody tobe able to outsource, you know,
the introduction of middlewaresoftware, right, or middleware
uh solutions, so.
So the initial calls were veryenlightening because, um, they
were everywhere, you know.
Somebody was interested in thecost savings, somebody just
(09:33):
couldn't find enough staff.
So there were a number ofthings, and what I realized very
early on was we needed tospecialize.
This was before open sourcesoftware, so the majority of the
near shore projects andoffshore projects were very IT
centric and off-road projectswere very IT-centric, and so
(09:57):
your specialization evolvedaround helping implement things
like SAP or Oracle or PeopleSoftor BI solutions that were
becoming more prevalent.
And what was happening at thesame time is a lot of these big
companies were pushing softwareand many of those
implementations were failingbecause they hadn't figured out
yet that you have to customizethe stuff in order for actually
(10:20):
to work.
So there were a lot ofdisruptions happening at the
same time.
It was like a perfect storm,and in some cases, if you had
developed a good enoughspecialty in one area or another
, you could differentiateyourself and, of course, if you
were in a position to do it at alower cost.
You can also differentiateyourself.
(10:41):
The other challenge was youdidn't have enough staff.
Like you know, this was theearly days of IT in, for example
, mexico, so the country itselfwasn't pushing it as a way for
export, just like India was alittle bit more ahead of its
time in terms of pushing it, soit was more challenging in the
(11:03):
early days.
The sales cycles were longer andthe conversations were very.
Mostly the salespeople werelearning what would work and
stick.
But eventually we figured out.
You know you have to get goodat specializing in certain
competencies and I remember westarted to get very focused
around some SAP competencies andwe landed on some strong ABAP4
(11:27):
development type of competencies.
That was the rave back then andso we started focusing on that.
And then we also startedfocusing on some CRM initiatives
.
Again, crm look at Salesforce.
Back then they were a smallcompany.
They were not the behemothgiant they are today.
So I remember being able tocontact some of the CEOs of
these companies back then andworking with them and figuring
(11:50):
out how do we solve this problemfor this particular client.
So very early days of learninghow to position these services
to a certain degree, it was likebeing in a startup.
You know stuff.
Speaker 2 (12:05):
Yeah, you know, as you were talking, I was just
thinking about things we takefor granted today, like agile
development, aws, slack, jira,and I'm sure some of that didn't
even exist.
You had to find solutionsaround that as well.
Speaker 3 (12:22):
Very different world and we certainly weren't talking
about developing software.
Companies were not trying tofigure out do we license and
customize versus build and own?
Open source really hasdemocratized building out
software.
Many companies the lines areblurring today between what is
(12:43):
an enterprise company or atechnology company.
Many enterprise companies haveadopted build your own software
stacks.
Those were not the days wherethis was happening.
It was very clear cut.
I had a third-party platform.
I had middleware software Ineeded to work with.
I'm trying to get some BI inplace.
You know you're working withMicroStrategy, the SAPs of the
world, the Oracle, the Siebelsystems of the world.
(13:04):
I mean, some of these companiesdon't even the names, don't even
exist anymore, right, but itwas a different world.
It was very fragmented and, uh,everything was done on premise.
Yeah, so remote work was alsoforeign.
So we had a lot of challengesof introducing something that
hadn't been done, uh,introducing something that was
different, while at the sametime there were many other
(13:26):
technology disruption,middleware was being introduced.
Uh, you know, other things werecoming on board new startups,
new technologies, new beingintroduced.
Other things were coming onboard new startups, new
technologies, new computingpower.
All these things were happeningat the same time.
So in the early days you'rejust trying to.
It's like a race.
You're keeping up witheverything that's going around
you.
It's still happening today, butnot at the pace this was back
(13:47):
then.
This was such atransformational moment in our
technology history that anythingthat can help you differentiate
yourself was key.
So landing on terms like nearshore, developing certain
expertise being very nichefocused and owning a segment,
building partnerships withcompanies that were moving the
envelope forward these were allkey things to being successful
(14:10):
back then.
Speaker 2 (14:11):
Yeah, one other thing I was going to ask you about
with the early days, which isstill a factor today, is customs
and hardware and getting theright equipment to the right
people.
And you know, as countrieseither ease or create more
constraints around, you knowmoving equipment around.
What was that like?
(14:32):
And you mentioned Monterey, soI imagine most of the operation
was there.
What was that like in the earlydays?
Speaker 3 (14:39):
Difficult, but you know you had to be a lot more
creative.
Let me just paint the pictureof a typical solution that is
actually embedded in our phonestoday.
Typical solution that isactually embedded in our phones
today.
I remember working with Viacom,which owns MTV and VH1.
And the MTV and VH1 executiveswere complaining about how much
(15:07):
travel the creative teams neededto do between New York and Los
Angeles, and so the number wasvery costly.
There was, if number was verycostly, number two.
It's just very productive, verytime consuming, so it had an
impact on productivity, whichultimately impacts creativity.
So, like, is there a way we cancreate collaborative rooms?
You know conference roomsbetween these two cities, and so
(15:30):
I remember working on creatinga video conferencing room and
back then it literally like youhad a conference room that was
wired with like equipment and Iremember talking to picture tell
about needing the hardware forthe equipment and cisco for the
collaborative platform and thevarious software that needed to
play into this.
(15:51):
And then you have to deal withthe, the telecom connectivity,
and did you have enoughbandwidth between these two
locations?
This is live video on aconference.
So t1 wasn't going to cut itand ds3s were very expensive
back then.
There's so many factors.
This was a multi-million dollarinitiative.
Today we have facetime on ourphone, zoom right, I mean it's
(16:12):
like it's we take it for grantedI can just connect with a
hundred people instantly.
You don't think about do I haveenough connectivity, do I have
enough bandwidth between you?
Just don't even think about itback then.
That that was the kind of stuffwe had to work on and put
together and and uh, it wascomplex challenges,
multi-million dollar challengesthat today just becomes a
(16:33):
commodity right.
So those were very much theheydays of putting us on a path
towards automation, towards moreconnectivity.
And the technology just wasn'tup to snuff.
So it was more costly, it wasmore complicated, you had to put
together a lot of differentpartners.
You didn't have a one-stopsolution, but the guys who
played in it learned.
More costly, it was morecomplicated, you had to put
(16:53):
together a lot of differentpartners.
You didn't have a one-stopsolution, but the guys who
played in it learned a lot.
We learned how to solveproblems.
We learned how to leveragetechnology to solve business
problems.
This wasn't about implementing avideo conferencing solution.
This was about connecting twocreative teams together on a
regular basis so that they canimprove their productivity.
(17:14):
So we learned how to tie in thetechnology to solve the right
business problem, and thosethings have informed many of the
things that have come over theyears that still, you know, have
evolved into agilemethodologies, lean canvas, all
these things.
Design thinking contributedtremendously to a lot of these
things that we now take forgranted or are readily available
(17:37):
at our fingertips.
But I felt like I was workingwith the people that were paving
the way for the early days oftechnology and the evolution
that it's taken over the past 25years.
Yeah, that's awesome.
Speaker 2 (17:49):
Um, no I didn't know at the time.
Speaker 3 (17:51):
I was participating in that.
That's the funny thing.
You're just doing it and thenyou realize you look back like,
oh, we kind of did a lot tochange the world.
Had no idea we were doing that.
Speaker 2 (18:02):
Yeah, we rarely ever know we're in the moment until
the moment passes.
But yeah, that's a great pointand maybe a little bit of a
change to geography.
So my understanding is themajority of your near-shore
experience was leveraging Mexico.
Talk about some of your travelsthere experiences, cities,
(18:27):
meals We'd love to hear some ofthe fun stuff too.
Speaker 3 (18:32):
I fell in love with mexico back then.
I was, uh, traveling in and outof monterey I lived in new york
city at the time prettyregularly was not easy to get a
direct flight.
I'd fly, usually throughhouston, and, uh, I would say I
wish we had more, you know, zoomand things like that that we do
(18:53):
today, because back then a lotof things happened in conference
room and whiteboards, a lot oftraveling, and I was a new
father at the same time, so Idid miss out a lot in terms of
my son's growth with all thattravel.
I remember one time I traveledI was, I think, in four cities
in one day.
So you know, I had breakfast inone city, lunch in another,
(19:15):
dinner in another.
I think.
Three cities, excuse me, notfour, but you know that's the
way it was back then.
So I was younger, I hadprobably a little more energy
than I do now, but I did fall inlove with the Monterey.
It was a great culture, veryservice-oriented culture.
I've had the pleasure since thenof traveling into other cities
(19:37):
and operating in other cities,like Guadalajara and Hermosillo
and Chihuahua in Mexico City,even Merida on the east coast of
Mexico, and I've seen in Colimajust south of Guadalajara.
They have all the uh, all theum react talent in the world
over there.
(19:57):
So you know I I've um, you knowI've.
The whole near shore space hasreally evolved since then.
Now it's not just mexico, youhave costa rica, you have peru,
chile, colombia, argentina,brazil, and every country has
(20:20):
its own specific nuances andspecialties.
Some of them are more mature inone area than others.
So it really becomes importantto understand the landscape If
you're a service company,especially that you can make a
recommendation based on whereyou think the best talent is.
There are certain skill setsthat are strong in some markets
than others, so it's really justunderstanding your product, and
(20:42):
the product is the people andthe talent.
But I've been amazed at thequality of work that happens out
of Latin America.
I've worked with engineers thathave been toe-to-toe as good as
any Google engineer, and soit's very impressive.
And also because it's a Westernworld culture, it's not a very
(21:04):
yes-oriented culture, whichhappens a lot in Asia.
So when working in agileenvironments that require daily
stand-ups number one, you coulddo it in concurrent working
hours.
Number two, it's not a yes,we'll get that done and figure
it out later it's more like no,that doesn't work.
Here's why.
So there's more of acollaborative situation that
(21:28):
takes place.
So I've learned that if youwant to create the closest
experience to having hired agood employee, a remote employee
, your best bet out of NorthAmerica will be, you know,
really in Latin America.
That's where you're going toget to that experience, and
that's not me selling it becauseI've been involved with it for
25 years.
It's just the fact of havingseen it hands-on.
(21:50):
And it works the same way forother regions of the world that
are near shore to those markets.
And so, ultimately, what I thinkhas happened, brian, is the
outsourcing space has evolvedand matured to the point where
everybody understands the valueof near shore.
Everybody wants near shorewithin their continent.
(22:12):
People in Europe want nearshore, which is why Eastern
Europe has grown so much.
You have development shops inthe Ukraine and Poland and
Croatia.
They're serving the needs ofthe UK and EMEA.
They also serve the needs ofthe US on an offshore basis.
But I think the pandemic reallyopened people's eyes to realize.
You know, what we really needis just remote workers that are
(22:35):
within the same concurrentworking hours.
So you're going to see acontinuous shift, I think over
the next five to 10 years, wherethe concept of offshore will
become mute.
It's more like where can I findthe talent that's close to
where I work?
So if it's Europe, it might beEastern Europe.
If it's Asia, it might be inIndia and Vietnam or in Malaysia
.
If it's in North America, itcould be Latin America or it
(22:57):
could be Canada.
Right, but the point is peoplewant to work within the same
concurrent working hours andalso there's a cultural
alignment and there's a strongerpropensity to understand the
accents within the region thatyou're in.
Right, and then that's areality you have to face.
You know we're all verydifferent.
You have to accept thosecultural differences too and
(23:19):
harmonize them, and sometimesworking in a nearshore fashion
everywhere allows that to happen.
So I'm excited to have seen howwe started something in one
region that has been reallyreplicated throughout the world.
Speaker 2 (23:32):
Yeah, you know, one thing that I noticed you didn't
lead with with some of thereasons was price, and of course
it's cheaper than onshore.
But I feel like the world hasrealized like you can only go to
the bottom on price.
Nearshore is not really leadingwith price.
(23:55):
It's workday overlap, it'squality of work, it's cultural
alignment.
I don't know if you have anythoughts on that.
Speaker 3 (24:03):
There's also been a shift, Brian.
Speaker 2 (24:08):
Yeah, how price is part of your conversations with
buyers lately.
Speaker 3 (24:14):
Most of the outsourcing companies started in
IT services and selling toenterprise companies, where the
expectation has always been youscope the work, you take
ownership and you move itforward and in that model you
(24:35):
can have a lot of leeway interms of the kinds of talent you
have on the team.
You can have a mixture ofsenior and junior so you can
manage the margin right andthere's definitely a cost
benefit of having done itoffshore and nearshore.
That was a big driver.
The labor arbitrage was a bigdriver.
The cost the labor arbitragewas a big driver initially,
absolutely no question about it.
(24:57):
The gap between what the savingswere back then to what it is
now has continued to shrink andthe reason for that is because
there's also been a shift in thetalent pool.
There's more demand forsoftware engineering talent
versus systems integrationengineering talent, which is
very different DNA.
(25:18):
I could be a systems integratorworking on a third-party
software, doing customizationand doing that kind of work.
That's a different skill thansomeone who can write code from
scratch and build a product,than someone who can write code
from scratch and build a product, someone who could take an idea
from an app and build a product.
So over the years, a lot hasshifted towards agile, towards
(25:40):
building more products.
Software is really kind ofeating the world, and not only
technology companies have had aneed for more developers and
there's not enough of them inthe US, so it's become an issue
in just where's the talent right?
So when you get to a placewhere you have 10 openings for
every one available engineer,you don't have enough people, so
(26:01):
you have to look beyond yourboundaries, and so it's not so
much.
Where can I go save money as itis?
Where can I go find the talentto keep my roadmap on track, to
make sure I follow through onthe promises I made to the board
?
Yeah, so it's.
It's a critical shift.
Now there's still some who camefrom the it space.
They're always trying tonegotiate a better deal, but
(26:22):
it's like you know what's what'sreally important here you make
some commitments and you can'tfind people.
So don't worry about the price.
The price is a component, butit's not the component.
So the focus needs to shift andit's happening more near shore.
I've seen it, which is one ofthe reasons we've expanded into
(26:43):
other markets in Latin America.
We keep expanding into othermarkets because there's still
that desire for labor arbitrage.
That's always there, right?
But as time goes by, you'regoing to see a continuous shift
around that, because, especiallywith more technology that's
driving everything and moresoftware that's running
everything, ai in some casesmight eliminate some jobs, but
(27:07):
in other cases will create morejobs for people who can build
these things, who can managethese things, who can execute
against them, and those arespecialized skills that you're
not going to get good talent ifyou're trying to be, you know,
cheap, right?
So the idea is to balance that.
There's still value in thelabor job arbitrage, but it's
more like 15, 20% versus what itused to be 50, 70%, yeah, and
(27:31):
you can get more savingsoffshore, but then that's also
shifting.
I mean, let's look at India,right, India's got its own tech,
silicon Valley approach tothings today.
So if you were a servicescompany, you're losing people to
folks who want to go work for asoftware company.
They don't want to be in aservices company, they want to
be in a product company.
They want to replicate what'shappened in Silicon Valley.
(27:53):
So it's taken a lot longer tofind talent.
The attrition rate's a lothigher if you're in a service
business, because people want towork for software companies.
So the market's shifting there.
So you have to keep in mindthat with that shift comes
rising costs because you'recompeting for talent.
And when you compete for talentthe prices go up.
(28:14):
And the same thing is happening, you know, in Mexico and other
marketplaces as well.
So it's really about where canI find the best talent that
serves the needs that I need formy roadmap In the IT space?
You still have a lot moredifferent cost structures.
Lower cost structures becauseit's not as complex as building
software.
You're really just customizing,implementing and integrating.
Speaker 2 (28:37):
Yeah, yeah, that's great.
That's great Just for fun'ssake.
A lot of people I know in theUS, when they think of Mexico
and tourism, they're thinkingCancun, Acapulco and so forth.
They're not necessarilythinking Monterey, Guadalajara,
(28:58):
places that you've spent a lotof time in.
Give us your tourism pitch forthose cities and what would be
draws for people to check thoseout.
Speaker 3 (29:11):
Well, I mean Monterey , caprito is the king of
Monterrey, you know, it's likeyou want some good goat or lamb,
that's the thing.
They know how to make it reallywell.
Oddly enough, one of the bestItalian meals I've ever had was
actually in Monterrey, mexico,and I grew up in Italy, so that
says a lot about the kind ofit's very much a foodie kind of
(29:33):
area, and if you like limemountains and that kind of thing
, you'll definitely enjoy it.
But every place is different.
You know Hermosillo they makethe best steaks on the planet
there and they're known like theNew York Times rated them as
the best hot dog in the world,right?
So if you want a doggo, you goto Hermosillo.
And they have some other thingsthere, from a foodie's
(29:55):
perspective, that you can't findanywhere else, even the
Bacanora, which is a form oftequila that's very specific to
the Sonora region.
You can't find that even inother areas of Mexico.
And then, of course,guadalajara has its own
delicacies too, you know, andthat's a very modern city.
If you go into, like Zapon, thedowntown area, you feel like
(30:17):
you're in New York City.
If you take a picture from arestaurant outward and you send
it to a friend, they're going tothink I thought you were in
Mexico, you're in New York.
It's a very different vibe.
So it's a very modernized city,and in Mexico City it's the
biggest, I mean, it's huge.
You fly over it for an entirehour before you land, right.
So it's, you know, it's there'ssomething for everyone, but the
(30:41):
people are very, um, serviceoriented, uh, it's, it's a, it's
a giving, hard working kind ofculture, and so there's
definitely, uh, a lot thatyou'll enjoy.
So you know this.
I'm talking about the citiesthat are non-tourist cities.
Yeah, so, of course, thetourist locations, the beaches,
(31:02):
etc.
All that thing is wonderful,but in the uh, in the other
cities, you won't feel likeyou're in such a foreign place.
Yeah, people always surprise,like this feels like I'm back
home, because because it's it'sa modernized country with a lot
of modern cities.
Speaker 2 (31:16):
Yeah, yeah, that's great.
That's great Talk about whatyou see for the future.
You know of nearshoring anddevelopment, and you mentioned
AI before.
What are some trends orpredictions that you recommend
we're mindful of?
Speaker 3 (31:35):
I think we're going to see more globally distributed
teams where the programmanagement or program management
, I'm sorry, project managementthe subject matter experts, the
architect type will be close tohome.
So you're going to see more ofonshore, nearshore demand for
(31:56):
that kind of expertise becauseit just makes sense, it's smart
business to do it that way andleveraging still some arbitrage
opportunities offshore where youcan.
So I think ultimately there'sstill some companies that have
waterfall methodologies thatallows them to do follow the sun
(32:18):
, and then there's those whohave more agile methodology that
doesn't allow it, so they needto work more in the same time
zone.
But I think over time, what AIwill do is a couple of things.
I think AI can enable a followthe sun for everyone so that you
can leverage globallydistributed team more
effectively, so that you canleverage globally distributed
(32:39):
team more effectively.
So in some ways, if donecorrectly, ai can build some
program management expertisethat can automate the
distribution of work and alsohelp facilitate it, because
that's hard work sometimes youcan't be up all day and all
night managing these teams right.
So I think AI will be a gamechanger from that point of view.
(33:01):
Also, you're going to see moreof AI being used for some
automation like testing and QA,even some development.
So some of the teams will playmore of a not kind of role,
right, they're monitoring thebots doing the work, making sure
it's following a good cadence,and they're playing that expert
role and, as a result of that,you can do it more effectively,
(33:26):
no matter where people are, andwhat ultimately will happen.
This is just my own prediction.
I don't know if it'll take 20years or 10, the price points
will be very similar no matterwhere you go in the world.
I think the arbitrage modelwill eventually disappear and
it's just going to come down towhere can I find the best talent
?
How am I leveraging AI tomanage it all in such a way
(33:48):
that's transparent and seamlessand that's going to change the
trajectory of the entiresoftware development industry.
We're not there yet.
I don't think we see it yet, butthis is just what I'm seeing in
terms of how AI will evolve ourspace and really just in some
ways, create more equivalenceworldwide.
(34:10):
You know, I think this idea ofarbitrage shouldn't be there
personally.
So in some regards, it's goingto equalize things worldwide and
the cost savings will come fromsome more automation and using
AI, so you'll still get it, butit's not going to come from the
(34:30):
arbitrage of labor based onwhere people are.
That's just my personalprediction, based on what I'm
seeing and what I've seen overthe past 34 years, of where
things are going to go.
When are we going to get there?
I don't know 10 years, 20 years, maybe the next five years, but
I think that's where it's goingto go.
Speaker 2 (34:45):
Sure, Now, in the present day I really think this
is the decade for Latin Americaand more and more conversations
I'm having there's moreawareness, which leads to more
curiosity, of, oh, likeNearshore.
(35:06):
What is that?
Can you explain it to me?
Which means there's morecompanies trying this out for
the very first time.
What sort of advice would youhave for companies that are
making their first venture intonearshoring, that are making
their first venture intonearshoring.
Speaker 3 (35:20):
I think it's a valid point, not just for North
America, but you'll see the sametrend in the UK and Europe,
with South Africa, for example,and Eastern Europe.
Both are good nearshorelocations from a concurrent
working hours, and you'llcontinue to see more in Asia
with, like India and Vietnam.
(35:41):
Vietnam is an emerging marketthat is actually very strong.
For example, our company wehave 2% attrition rate out of
Vietnam, which is unheard of inthis industry.
So it comes down to this Don'tlook at it as near shore or
anything like that.
I think that term while I'mproud that I was part of the
(36:01):
team that created it needs to bedropped.
It's just remote work, and ifanything the pandemic has taught
us is that you can get thingsdone no matter where you are,
(36:23):
things done no matter where youare.
So if you're new to Nearshore,just think of I'm just hiring
remote workers.
It doesn't matter if they're inGuadalajara, in Lima, in Cali
or Santiago.
It really doesn't matter.
It's no different than thembeing in Dallas, tucson, new
York.
It's no different than thembeing in Dallas, tucson, new
York, miami or Seattle.
And that shift in mindset willopen up many, many more doors
(36:45):
for technology leaders, becausethey'll begin to realize that
there's people on both sides,whether they're onshore or
nearshore, and it really justcomes down to having good
connection, being able tocommunicate with each other,
being able to have intimacy,which is what happens with
concurrent working hours andultimately, just think of it as
(37:05):
remote workers.
It'll save yourself a lot ofheadaches like, oh my gosh, such
a big thing, we're movingoffshore, near shore, now you're
just tapping into anotherremote worker marketplace.
Yeah, that would be my advice.
That's good advice.
Speaker 2 (37:20):
Tulio, since I've met you, you've spoken a lot about
design thinking.
Can you share a little moreabout what that means and also
how it's come into play withremote work?
Speaker 3 (37:33):
Yeah, I've really embraced design thinking,
because what resonated for me isthis idea that the pillar of
design thinking is empathy.
You know, the genesis wasdifferent.
It was very focused on productand user experience, but it
really has evolved to be a wayto organize your efforts around
(37:57):
either solving a problem orfinding solutions or creating
opportunities.
And it's not just how you lookat user adoption for a product
or your go-to-market strategy.
It's really about how youorganize people and how you get
people working together.
(38:18):
People and how you get peopleworking together.
And at the end of the day,brian, no matter whether you're
a B2B company, a B2C company ora B2B2C company, we're all in
the people-to-people business.
There's a person who's buyingyour product or service.
There's a person who's sellingit.
There's a person who createdthe code on the website that's
(38:39):
selling it to you.
There's a person who investedin the company.
There's people involved,whether it's a direct
person-to-person relationship orthere's an app in between.
On both sides there's a person,and so understanding that
empathy allows us to get at adeeper level, not just a
(39:02):
transactional level, allows usto think about how do we create
better experiences that meetpeople's needs.
So when I think of designthinking.
It's a model for finding waysto get closer to providing on
the needs of people on theirterms, and so it creates an
(39:24):
environment where, when youthink about what you're solving,
you elevate it right.
So, for example, what does a CTOreally want?
They're in charge of a productroadmap.
They need developers, they needtesters, they need architects,
they need scrum math, they needall kinds of people that can
(39:45):
perform transactions right.
But the ultimate desire is tobe successful in order to meet
the needs of the commitmentsbeing made to the investors or
the board.
And, tied to that, your abilityto be successful is your
ability to take care of yourfamily, to achieve your
(40:08):
aspirations, all the personalthings that drive us on a
day-to-day basis.
Yeah, so when you're selling toa CTO, you have to keep in mind
empathetically what is it thatthey actually really want?
Those are the things that theyreally want as a human being.
The rest is just transactionthat enables them to achieve
(40:30):
what they really want.
So what design thinking does isit enables you to ask the
question five whys deep, tounderstand.
What is it that you're reallysolving?
What is the real problem?
What is the real desire thatyou're delivering on?
And it's got to be anemotionally tied desire, because
we're emotional creature.
And so as you begin to thinkabout how you structure your
(40:50):
organization, how you structurehow you serve clients, how you
structure how you build products, when you keep that in mind, it
changes your approach for thebetter.
And what happens is you beginto operate with the adoption in
mind up front, because it's allabout creating a great
experience for your employees,for your clients, for your
(41:14):
investors, for your partners,for your vendors.
If you keep that in mind, theonly way to effectively do that
is to use design thinkingmethodologies which allows you
to listen, ask more questions,connect, understand what the
real problem is or what the realdesire is, prototype and test
ideas, reiterate and get it to aplace where you're actually
(41:35):
driving intimacy.
And I mean when you think aboutsomeone like Steve Jobs.
He was masterful at it.
Apple, the Mac was not asuperior product when it first
came out to the PC.
Quite the opposite, it wasn'teven close.
But he created this emotionalattachment where, if you're a
cool kid, you're going to usethe Mac.
(41:56):
You know cool kids use Macs.
Or the crazies making the worldgo around use max.
I mean, look at that commercialthat they had out with einstein
.
You know we're we're supportingthe crazies who believe that
they can make a change in theworld, right?
So if you're one of the coolkids and you're the creative
type, it's like I'm one of thecrazies, I'm going to buy a mac.
He created a culture aroundthis.
(42:17):
You know, being part of thisgroup of cool kids, you know
that are creative and eventhough the product was not up to
snuff, eventually and it's nowthe leading PC in the
marketplace computer in themarketplace, right.
But he was masterful inappealing to the need and desire
of emotional creatures.
(42:39):
And he's not the only one who'sdone that.
There have been many otherbrands who have done that.
So if you can apply that in aB2B context, especially because
a lot of people think, oh, I'mjust trying to get a transaction
done, but there's still.
That is not true.
You can apply empathy intoeverything you do and I always
say empathy wins, always Ifyou're in a competitive
environment and you'representing your solution and
(43:02):
it's transaction versustransaction, the client's going
to choose the one that they feellike.
These guys understood me, theyvalidated my concerns, they
created a better experience andit's all subconscious, it's not
like they're actuallyconsciously thinking through
this.
It's because they feel thatthey were more understood.
(43:23):
So if it's apples to apples,the one that's going to win is
the one that's applying empathy.
So I really love it for manyreasons, because I believe that
as leaders, it's our duty tohelp people feel empowered and
to meet their needs.
The more we meet people's needs, the more we can all be
successful.
So everybody gets lifted up bydoing that.
(43:43):
No one suffers, no one loses byapplying empathy.
So design thinking is really asystem for improving the
human-to-human connection, to bemore people-centric in how we
do business.
Speaker 2 (43:57):
Yeah, great points about intimacy and empathy.
Yeah, thanks for sharing that.
Well, as we start to wind downthe show today, I just had a few
fun questions for you.
Sure, your favorite purchase inLatin America under $50?
(44:18):
Your favorite purchase in latinamerica under 50.
I gotta think about that one,besides food.
Well, if food is the answer,I'd love to hear that I mean
food.
Speaker 3 (44:27):
I would.
I would have to say food.
I remember, um I 50 would getyou really far.
Yeah, a restaurant, I mean youand your friends can eat like,
like kings and queens, for 50bucks.
Uh, you can have an incrediblemeal for under 50, and I'm not
talking about like, like itwould be equivalent of having
(44:49):
spent 500 here that kind oflevel meal.
So if you want to have like a,an incredible, like dining out
experience for less than 50bucks, you will.
You know, latin america willnot fail you yeah, I agree, I
agree wholeheartedly.
Speaker 2 (45:04):
Yeah, absolutely.
Uh, how about uh vocabulary?
Do you have a favorite spanishword?
Speaker 3 (45:13):
uh, I have one cute word, but, but it's an
inappropriate word.
You'd be surprised how oftenthat comes up on the show.
It's just a cute kind of way ofreferring to someone.
But I think in recent yearsthere was someone I worked with
in my last company that alwayssaid goodbye by saying besitos.
(45:36):
So I kind of adopted that as acute little word.
Sometimes I'll say things likebesitos, which means kisses, but
he could get away with thatkind of thing.
I don't know if I can get awaywith it as much as he did, but
that was definitely a cute wordbesitos as a way to say hi and
goodbye.
Speaker 2 (45:50):
Sure fair point.
Well, tulio, that's all thetime we have today.
Really appreciate you coming onthe show.
I want to give a thanks againto our sponsor, plug
Technologies pluggtech a greatplace to find software engineers
in Latin America for UScompanies.
Tulio, thanks again, it'sreally been a blast.
Speaker 3 (46:12):
Pleasure.
Thanks for having me All right,everyone.
We'll see you next time,besitos.
Speaker 2 (46:14):
Thanks for having me All right, everyone.
We'll see you next time.
Speaker 3 (46:19):
Besitos.
Speaker 1 (46:22):
Thanks for joining us at the Nearshore Cafe podcast
Tune in next week for a newepisode featuring another
special guest with excitingstories Ooh.
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